a) Write an expression for 8(t) (aka: force of interest) such that its accumulation function is the same as a 2% rate of simple interest. b) What is 8(8)?
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Write equation in the form: δ(t) = a'(t) / a(t)
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- What is the definition of internal rate of return (IRR)? If you expect the annual interest rates are much different in the next 10 years, would the IRR be the ideal measure? Why or why not?Toni received a loan of $200,000 at 10% interest. The interest was deducted from the loan at the time the money was borrowed. If, at the end of one year, Toni has to pay the full amount of $200,000, what is the actual rate of interest?What is the compound amount factor (CAF) if I is the interest rate per year, m is a number of periods per years, n is the number of periods and the interest rate is paid more than once in a year? a) | 1+ i b) | 1+. n c) | 1+ n d) | 1+
- Let p(t)= t2+1 represents a flow of income over time t from 1 to 4. Compute the Present Value (PV) of this flow if the interest rate is r=2.When interest is calculated only on the principal amount of the investment, it is known as calculated interest. Select one: True O FalseSuppose that $500 is invested at the end of every year for 5 years. The polynomial function that models the value of the investment is P(x) = 500x5 + 500x4 + 500x³ + 500x² + 500x, where x represents the effective interest rate plus 100%. One year after the last payment, the investment is worth $3200. Find the effective interest rate one year after the last payment, to the nearest tenth. (Note: You will need to subtract 1 from the value of x to find the effective interest rate.)
- The following equation was used to calculate the Net Present Value (P0) of a cash flow. Find the cash flow that generated this equation. You do NOT have to solve for NPV, nor do you need to know the interest rate. NPV = P0 = -5000 + 1500(P/A i,5)(P/F i, 2) - 700(P/G i, 3)(P/F i, 4) + 450(P/F i, 2)Question 4 The equivalent rate of interest for a discount rate of 10.5% for 60 days is 104.9825%. Hint: An interest rate r and discount rate d are said to be equivalent if these two simple rates give the same present value for an amount due in the future. Thus, r = d/(1 - dt) and d = r/(1 + rt)The only kind of interest rate that can be used in the interest formulas is: (EXPLAIN YOUR ANSWER) A simple rate A nominal rate An effective rate Either (A) or (C)
- FIN301 Copyright © 2020 Singapore University of Social Sciences (SUSS) Page 5 of 5Timed Online Assignment – July Semester 2020(a) Suppose Jack can get a 2% interest rate for a 6 month USD deposit, solve for the interest rate for a 6 month SGD deposit so that Jack will be indifferent to exchanging the USD now or in 6 months’ time. (Note: The 2% is not an annual rate but is applicable for the 6-month period.) (b) Suppose Jack decides not to use the forward market to hedge the exchange rate risk but use the futures market instead. Explain one (1) advantage and one (1) disadvantage of using each method.PLEASE STRICTLY SKETCH THE GRAPH OF CASH FLOW DIAGRAM (economics).John Doe received the following information in a mailed advertisement: "You could borrow $4,400 for just $184.62 per month for 36 months at 29.1% APR. Get the money you need at a payment you can afford." Would you take this borrowing opportunity? What is the effective interest rate being charged to the borrower? Assume the maximum acceptable interest rate is 15%. The effective annual interest rate is %. (Round to two decimal places.)